If you grew up a sports fan in the late 1980s or early 1990s, there is a strong likelihood John Costacos’ work hung in your bedroom. As former Houston Oilers quarterback Warren Moon said, “Nothing exuded cool more than a Costacos poster.” From 1986-96, Costacos Brothers sold more than 30 million sports and pop-culture themed posters (see: Oakland A’s Bash Brothers, Shawn Kemp’s Reign Man). Now, a quarter century later, the iconic artist is back, armed with $4.5 million of private investment capital and a treasure trove of I.P. Launching a blockchain-based digital collectibles company, he plans to reimagine his legendary poster series and create new digital artwork as NFTs.
Justin Moorad, the son of former player agent and MLB owner Jeff Moorad, is leading the new venture as its CEO. He acknowledges the marketplace for non-fungible tokens is crowded (and filled with money grabs), but he says the company’s emphasis on high-quality art will set it apart—just like it did for Costacos’ poster business decades ago. “Our differentiator is that we believe collectors and fans want unique pieces that speak to them…. That is the [difference between the] artwork collecting world versus thousands of random images from games that can fade over time.”
JWS’ Take: Costacos sold his original poster production business, along with sublicenses to the famed images, to Daydream Publishing in 1996. The company has been sold three times since. But because Costacos was smart enough to retain ownership of the I.P., outside of the physical poster category, he is now able to capitalize on the NFT craze.
The $4.5 million dollars raised comes from a cadre of former industry executives who seek to remain private. But Moorad explained the investment thesis centers around the idea that NFTs are “really about art” and that The Costacos Collection has the “best sports art brand,” and sports artist, under its umbrella. “All of the other players in the space are creating stuff that is more or less on commission—especially the [Autographs] and Candy Digitals of the world,” Moorad said. “[Their NFTs] are all templated. They are not telling stories.” And yet, people are still willing to pay thousands of dollars for their digital collectibles. Autograph is aligned with DraftKings; Fanatics launched Candy Digital.
While the quality of the artwork undoubtedly mattered when Costacos was making posters for bedroom walls, it’s likely less of a differentiator for NFTs residing in a digital wallet. But Jack Settleman (CEO, Snapback Sports) said the quality of the artwork “definitely matters [within the NFT ecosystem]. What made the Bored Apes pop so much was [that] their artwork was pretty interesting. [It] was a reason to get behind them.”
Settleman also notes we are heading toward a future where digital art is displayed prominently on walls. “Everything is going to screens. There have already been big NFT sales from big artists that either pair [the token] with a physical copy [of the artwork] or they actually send [the owner] a big TV,” he said. It is not hard to envision sports fans buying and displaying the posters they had as kids within digital frames.
SuperRare, a marketplace for one-of-one digital pieces, exists “very much like a traditional art market,” Settleman said (i.e. there are no promises of experiences or community). So, some have already adopted the concept of buying NFTs solely as art. In fact, there are artists on the platform whose work can sell for six figures.
To start, the Collection will reimagine some of Costacos’ classic posters, but to create new digital artwork, the company needs to acquire player rights (which is where some of the investment capital will go). To date, it has signed a host of NFL and MLB legends to exclusive NFT deals; a collective of former clients of Jeff Moorad (think: Moon, Troy Aikman, Will Clark) and Costacos (Roger Clemens, Jim McMahon). The plan is to add some current players down the line.
While the Collection will be able to ink deals at the player level, resource-rich competition is likely to prevent the company from signing official league deals. Costacos doesn’t see that as a problem. “Our poster images were unlicensed, but they outsold all the licensed stuff because they were better,” he said. Settleman agreed that while “having the I.P. or a partnership [with a league] obviously helps the project, it doesn’t mean that others can’t succeed without it.”
The company will go to market solely as a digital art product (the first drop is this Sunday). But Moorad explained the long-term vision is centered around tech development. The project roadmap promises to create exclusive post-sale experiences that enable NFT holders to connect and interact with their favorite players “in new ways.”
The roadmap also suggests the company will look to build a platform that serves as “the main destination for transacting around legendary athlete NFTs,” Moorad said, adding that the bulk of investment capital is earmarked for tech development. Settleman, however, sees that as an ambitious project to take on. “Top Shot has its own marketplace,” he said. “But 99.9% of other [NFT] projects essentially use OpenSea because it is a very large undertaking to not only be worried about building content, building community, building events, building your project and also trying to build the infrastructure for it. It just feels like two separate businesses.” It should be noted that Settleman’s NFT project (Knights of Degen) resides on OpenSea for that reason.
Creating a centralized platform for buyers and sellers to transact would enable the Collection to retain a larger portion of the profits associated with its project. But as Settleman noted, if the plan is to sell NFTs as a premium digital artwork, the creation of its own blockchain and marketplace is not a luxury; it’s a necessity. Ethereum gas prices (think: $40-$50) will otherwise make the cost of purchasing the digital posters prohibitive. Remember, the reason NBA Top Shot can afford to sell $9 packs is because it created its own blockchain and essentially killed gas fees in order to conduct micro-transactions.
The Costacos Collection will launch with the Winklevoss Twins’ Nifty Gateway and Topps as strategic partners. Moorad suggested the card company’s “player relationships and other content” could potentially be leveraged. There will also be limited edition card sets built around Costacos’ artwork.